First-time buyers beware

If you dont already own a home, should you sit tight or step onto the property ladder? Ros Dodd finds out

Last year, house prices rocketed by 26%, yet the average salary rose by only about 3.6%. And it doesn’t take a mathematician to calculate that this creates problems for those who are trying to get onto the first rung of the property ladder.

This widening gap has led Andrew Oswald, professor of economics at Warwick University, to predict that this year signals payback time. Something, he says, has to give to restore a “sensible balance” between wages and house prices. And unless your name is Lord Irvine, it’s unlikely your salary will increase above the rate of inflation.

Oswald warns that this means we’re just around the corner from a 1980s-style crash, and his message for would-be first-time buyers is simple — don’t. “I think it’s extremely risky to be buying now as a first-time purchaser,” he says. “We have had an extraordinary property boom and the lesson of economics is